If you are funding a construction project and immediately need funding but the loan process is delaying things, you should consider obtaining private money from Virginian hard money lenders. Virginia hard money can be easily obtained, provided that you have found the right company and possess a saleable property.
What are hard money loans and how can you obtain one in Virginia? Hard money loans, also referred to as private money loans are secured real estate loans funded by private investors with the value of the property serving as the collateral. For construction loans, the improved value of the property serves as the collateral.
In order to secure hard money lenders in Virginia, private money loans have higher interest rates than a conventional loan. For construction loans, the amount of hard money will be limited to 65% of the property’s improved value. At the same time, the lender lends only from the first position so that in the event of a foreclosure, they are the first the recover their investment. If ever you are approved for this type of loan, make sure that you have an exit strategy since hard money loans are usually short term. You can either sell the property when completed or refinance the property by lending in traditional institutions.
In construction loans, even though only 65% of the improved property value can be financed, all expenses pertaining to construction is generally covered by the loan. Most individuals or businesses that apply for hard money loans in Virginia have fast growing real estate investments that are ready for expansion. They opt for hard money loans instead of waiting for at least 40 days if they opt to lend in banks and other traditional lending institutions.
Hard money lenders are available all over Virginia. Before applying, make sure that you have the complete details of your real estate collateral, including the costs associated with your construction project, appraisal of the completed property, and your plans after the term of the loan is finished (otherwise known as your exit strategy). Expect to typically receive approval within seven days after you provide the needed information to your chosen private hard money lenders.